Public Sector Unions

  • Are Teachers Driving The Public/Private Sector Earnings Gap?

    A great deal of the debate surrounding public sector unions focus on how much public employees earn versus private workers. Every credible analysis – those that account for huge differences between public and private workers in terms of characteristics like profession, education, and experience – find that public compensation is competitive or lower than that of private-sector workers (for recent examples, see here, here, and here, or a review here).

    I have, however, heard a few thoughtful observers make the point that virtually all these analyses include education workers, and that this might be a little misleading. It’s a fair point. Roughly one in five state/local government employees are in fact K-12 teachers, while another five percent are professors at public colleges and universities. This is important because analyses of public/private sector compensation essentially compare public employees with workers with similar characteristics (education being the most important one) in the private sector. The research above indicates that workers with more education pay a larger “price” for working in the public sector, whereas many lesser credentialed, lower-skilled government jobs actually pay more. Since many teachers have master’s degrees (and professors Ph.D.’s), and they are such a huge group, it’s reasonable to wonder if they might be skewing the overall estimates.

    So, I decided to see if a comparison of public/private compensation that does not include teachers and professors would yield very different results. Let’s take a look.

  • How To Make A Misleading Public/Private Earnings Gap Disappear

    USA Today last week published yet another story claiming that public sector workers make more that their private sector counterparts - this one saying that Wisconsin is one of many states where this is the case. Their “analysis” used data from the Bureau of Economic Analysis, and compared total compensation (salary+benefits) between workers in the private sector and state/local government.

    No matter how many times they are told that you can’t just make a straight comparison of dissimilar groups of workers, apparently they still don’t get it. Incredibly, this particular article admits as much, and even quotes economist Jeffrey Keefe, who tells them that the gross comparisons don’t account for important sectoral differences in education and other factors. In other words, their numbers don’t tell us much of anything about public versus private sector compensation. Still, there is the headline: "Wisconsin one of 41 states where public workers earn more." How many people saw that headline, and now believe that public workers are “overpaid?"

    USA Today, of course, is not alone. These assertions have lately become insidious, coming from governors, commentators, and others. But when a major national newspaper decides to run this story at this politically-charged time, based on their very own “analysis," a separate response seems in order.

    I’ve discussed this issue before, but maybe it would be more helpful to show how the data are more properly analyzed in a step-by-step fashion, using 2009 U.S. Census microdata (the American Community Survey, available from the wonderful organization IPUMS.org). Here’s how you make a false earnings gap disappear in five minutes.

  • Seize The Day?

    Wisconsin Gov. Scott Walker’s determination to destroy collective bargaining rights for his state’s public employees has generated a lot of hyperbolic rhetoric from both sides. Some conservatives have taken particular umbrage at demonstrators’ signs likening Walker to Adolf Hitler, Benito Mussolini, and Hosni Mubarak. They are right that Walker is not akin to these brutal, murderous dictators, who solidified power by crushing independent unions. Indeed, they need not look overseas at all to find anti-union inspiration. The U.S. has its own rich tradition of union-busting – albeit considerably less fierce than in these particular dictatorial regimes.  

    This information is just a mouse-click away. Anyone with access to the internet can easily trace the history of violent state and business response to unions and union organizing in America, dating back 150 years. It’s not just the infamous Pinkertons and other thugs hired by business. Police, the National Guard, even federal troops have been used to brutally suppress workers’ efforts to form their own unions. Homestead, Haymarket, Ludlow, Pullman, the 1937 Battle of the Overpass – all are storied examples of incredibly violent action against workers and their organizations.

    This sort of drama, punctuated by carnage and death, is pretty much a thing of the past. With the passage of the 1947 Taft-Hartley Act and 1959 Landrum-Griffin Act, anti-union judicial decisions, global outsourcing, and the emergence of union-busting consultants, quashing unions has become, well, child’s play. America’s private sector unions have been on the defensive for better than half a century, with membership eroded to only seven percent of the private sector workforce. With Wisconsin, the attack against public service unions is well and truly launched.

  • A Wisconsin Moment For Our Education Policy Debate

    There is an obvious, albeit somewhat uncomfortable connection between what’s happening in Wisconsin and what’s been happening in education policy discussions.

    A remarkably high proportion of the discussion is focused – implicitly or explicitly – on the presumed role of teachers’ unions. The public is told that our school systems are failing, and that teachers’ unions are at least partially to blame because they protect bad teachers and block “needed” reforms such as merit pay. In this storyline, unions are faceless villains that put the interests of adults above those of children.

    Wisconsin represents a threat to this perspective in at least three important manners.

  • Revisiting The Effect Of Teachers' Unions On Student Test Scores

    The Wisconsin protests have predictably spurred a great deal of information-seeking, with union supporters and opponents alike searching for evidence that supports their cases. One of the most prevalent topics over the past week or so is the effect of teacher collective bargaining on student test scores. As a result, a couple of our previous posts have been shared widely. The first (also republished here) compares NAEP scores in states that allow binding teacher contracts with those in states that do not (or have only one or two); the second, follow-up post offers some additional, multivariate analysis.

    Although it is true that the first post (which was at least partially satirical - see the last few sentences) shows that states without binding contracts are among the lowest-performing in the nation, I want to clear something up: As I noted in both posts, neither the data nor my argument offer any conclusive proof that teacher contracts act to increase student test scores. The intention of those posts was to address the age-old counter claim – that teacher contracts are somehow injurious to student achievement – and to provide very tentative evidence that the contracts appear to have little discernible impact either way (which is what the follow-up post, using state-level models that controlled for basic student characteristics, indicated, along with the requisite caveats).

    This speaks directly to those who seek to blame unions for poor achievement in the U.S. - if union contracts were in fact a major contributing cause of low test performance, it might be reasonable to expect to find at least some clear differences between states that did and did not allow them. Although my analysis was extremely limited, I found no such evidence.

    But this also applies to those who have been claiming recently – many in the Wisconsin context – that teacher bargaining clearly improves these outcomes.

  • Unions = Jobs

    America needs stronger unions… This piquant idea recently occurred to a New York Times business writer as he contemplated the economic question of the day: Where are all the jobs? It’s the question on everyone’s minds. Most economic reports indicate that the economy—at least the corporate profit and Wall Street side of it—is recovering slowly. Profits are soaring and U.S. GDP is up, but job creation remains sluggish, at best.

    So what do unions have to do with it? Before exploring that issue, let’s review why job creation—or it’s lack—is worrying people who are paid to worry about the economy. According to a recent National Journal article, "The Great Recession wiped out what amounts to every U.S. job created in the 21st Century. But even if the recession had never happened the United States would have entered 2010 with 15 million fewer jobs than economists say it should have."

    The article adds that, while the period 2001-2008 witnessed "solid growth" in GDP and corporate profits and a low unemployment rate, job creation was far lower than at any time since World War II.

    What happened?

  • Are Public Employee Unions To Blame For States' Budget Crises?

    A disturbing number of people are blaming public sector unions for states’ current budget crises (also here, here and here). Their basic argument is that unions have seriously exacerbated budget shortfalls because a significant proportion of state spending is tied up in employee compensation, and unions, via collective bargaining, increase salaries and benefits.  As a result, so the line goes, unions have created unsustainable expenses for state governments in a time of declining or still-recovering revenues.

    Needless to say, the relationship between unions and state revenue/spending is complex.  The claim that unions are responsible for state budget gaps (or at least for larger gaps) is therefore extremely difficult to examine, especially during a fiscal crisis. Nevertheless, we can take a quick, modestly rigorous look. 

    There are 30 states that provide collective bargaining rights for state employees, virtually all of them via state laws. One way to evaluate the merit of the accusations above is to see whether states that allow collective bargaining have more severe budget problems than those that do not.

  • Ready, Disclaim, Fire

    Earlier today, newly-elected Michigan Governor Rick Snyder released his "Citizens’ Guide to Michigan’s Economic Health." The general purpose was to provide an easy-to-understand presentation of the state’s finances, and to encourage local governments to do the same. These are of course laudable goals, but one of the report’s major findings, also mentioned in the governor’s press release, was a familiar one:

    Average annual compensation of state employees (including salary, wages, and benefits) was over twice the average annual compensation of private sector workers in 2009.
    As might be expected, many reporters and editors dutifully ran this outrage-inspiring finding as a headline (also here and here), even before the report was officially released: State workers make twice as much as private sector workers. Governor Snyder rolled out the report as part of his presentation to the Business Leaders for Michigan Summit, in which he spoke about the state’s fiscal situation.

    I’ve already discussed how these gross comparisons of public and private sector workers – whether nationally or in a single state – are invalid. That is, they compare two completely different groups of workers: Public employees, who are mostly professionals, and private sector workers, many of whom work in lower-wage, lower-skill jobs. But this time, you don’t need to take my word for it. After featuring the “twice as much” finding in a header and pull-out quote, the governor’s report says it directly:

    However, this analysis does not compare private and public sector employees with similar jobs, years of experience, or education.
    Let me translate that for you. It means: This comparison is meaningless.
  • Meet The Bureaucrats

    You needn’t look far to see that state public employees are under intense scrutiny. Politicians and other commentators are using rhetoric that is simplistic and often misleading. But, in the debate over their relative value, these state workers have an additional problem: I get the strong feeling that most Americans have little idea what they do.

    If you ask the average person to describe what a public employee does, you might hear the word “bureaucrat." Those who wish to dismantle large chunks of the public sector have come to use the term as the pejorative for all public servants (most often in the federal government context) - probably in the hope that it will conjure up images of large government buildings filled with endless rows of faceless, overpaid desk workers collating papers.

    So, who are these state public employees? What are they actually doing? These are very basic questions, yet they are rarely addressed in detail, at least not lately. And, let’s be honest – in one way or another, our tax dollars do pay for these workers’ services, and regardless of your views on state budget troubles, it’s always good to know what you’re paying for. Luckily, of course, the question is easily answered. In the simple table below, using 2009 data from the Occupational Employment Statistics program of the U.S. Bureau of Labor Statistics, I present the breakdown of state government workers by occupational category (note: these categories are comprised of varying numbers of similar detailed occupations, and while my examples in the table are the largest, they are not the only ones in each category).

    In order to summarize this table, let’s suppose you’re invited to a party to meet ten people, who are a roughly representative sample of the 4.5 million state employees across the nation. Let’s meet the bureaucrats!

  • Death Of A Teacher Union Icon

    The New Year brings sad word of the passing of Szeto Wah, celebrated Hong Kong democracy activist, legislator, and teacher union leader. He died on January 2 at the age of 79.

    Once recognized by Time Magazine as one of the 25 most influential people in Hong Kong, and known by millions as "Uncle Wah," Szeto came to prominence in the 1970s as the firebrand founder of the Hong Kong Professional Teachers Union (PTU), which he led from 1974 to 1990. He was also a founder and leader of the Hong Kong Democratic Party, served in the Hong Kong legislature from 1985 to 2004, and was the founder and chairman of the Hong Kong Alliance in support of Patriotic Democratic Movements of China. The alliance was the leading organization offering support to the pro-democracy movement in Mainland China, which organized yearly protests on the anniversary of the Tiananmen Square massacre.

    While condolences flow in from all over the world, the political question of the day in Hong Kong is whether or not the Chinese authorities will allow exiled democracy activists back into Hong Kong to attend Szeto’s funeral. Wang Dan, one of the most prominent of the Tiananmen Square democracy leaders, said that, for him, the loss is personal: "Uncle Wah has always been my personal mentor and a leader in the democratic movement. The greatest achievement he has made has been to pass on his beliefs before he left us. The younger generation now remembers June 4," he said.

    We at the Shanker Institute also feel this as a personal loss. We met Szeto in 2002, when he travelled to Washington D.C. to deliver the Institute’s Albert Shanker Lecture. In it, he credited Al Shanker with helping to shape his political and organizational perspective: